Shell to explore Kazakhstan's Zhanaturmys oil and gas block

ASTANA. March 5 (Interfax) - Shell (SPB: RDS.A) Kazakhstan has signed a contract with Kazakhstan's Energy Ministry to explore the Zhanaturmys oil and gas block in the Aktobe region, the ministry's press service said.

The contract covers seismic surveys, data collection and technical evaluation in accordance with current regulatory requirements and subject to obtaining the necessary approvals. Given the scale and technical complexity of the project, the contract will run until 2032.

The project will be implemented under the terms of an improved model contract. Over the contract period, Shell will allocate at least 100 million tenge to support socio-economic development in the region where the Zhanaturmys block is located.

The Zhanaturmys block covers an area of 1,377 square kilometers and is located in one of Kazakhstan's most promising oil and gas basins. The work program includes 3D seismic surveys and the possible drilling of a deep exploration well, the Energy Ministry said.

Shell holds stakes in several projects in Kazakhstan, including the North Caspian Production Sharing Agreement (16.81%), the final production sharing agreement for the Karachaganak field (29.25%), and the Caspian Pipeline Consortium (7.4%).

In February, Shell CEO Wael Sawan said the company was putting new investment in Kazakhstan on hold due to a lack of alignment between joint venture partners and the government on key issues. The statement came after a Stockholm arbitration tribunal issued an interim ruling in a dispute between Kazakhstan and the shareholders of the Karachaganak field's operating company, ordering compensation of $2 billion to $4 billion to the state.

Later, commenting on Sawan's statement, Kazakh Energy Minister Yerlan Akkenzhenov said that, in fact, Shell wishes to continue developing in Kazakhstan. He added that he doubted foreign companies would leave the country, noting that their investments "are paying off handsomely."